Advantages of Chapter 11 Bankruptcy

Chapter 11 bankruptcy is ideal for corporations which want to continue their operations and at the same time go through reorganization or restructuring of their business to be able to pay creditors
…

Chapter 11 bankruptcy is ideal for corporations which want to continue their operations and at the same time go through reorganization or restructuring of their business to be able to pay creditors and also generate income.

Know more about chapter 11 bankruptcy visit http://www.johncranebankruptcy.com/chapter_11_bankruptcy. You can contact John M. Crane, P.C. at : 212-571-1898, 718-509-6542
914-380-4209, 914-481-3450 for more information.

Transcript

1.
Advantages of Chapter 11
Bankruptcy
Disclaimer: The contents of this page are general in
nature. Please use your discretion while following
them. The author does not guarantee legal validity of
the tips contained herein.
Tel: 212-571-1898,​718-509-6542
​914-380-4209, 914-481-3450
www.johncranebankruptcy.com

2.
Chapter 11 bankruptcy is ideal for corporations which want
to continue their operations and at the same time go
through reorganization or restructuring of their business to
be able to pay creditors and also generate income. There are
many advantages of being in chapter 11. Some of them are:

3.
Automatic Stay
• The debtor benefits from an automatic injunction of all
lawsuits, foreclosures, repossessions, bank levies, wage
garnishments and other collection activities.
• The automatic stay is immensely helpful for debtors who are
facing aggressive collection action by creditors, and is the first
step in reorganization.

4.
Right On Business
• The debtor is still given rights on the business.
• They will act as a debtor in possession which means that the
debtor still have some rights to acquire the earnings of the
business but would still prioritize to pay off their debts.

5.
Avoidance And Recovery Of Certain Involuntary
Transfers
• The debtor can avoid and recover certain bank levies, wage
garnishments, lien notices, even repossessions of vehicles or
equipment that occurred prior to the filing of the bankruptcy.

6.
Preservation Of A Going Concern
• Debtors that are operating a business can continue business
operation in a chapter 11.
• The business name, goodwill, and customer base are not lost.

7.
No Mean Test
• Unlike Chapter 7 and Chapter 13, the means test does not
apply to the individual debtors in chapter 11 cases
• They may propose repayment plans that are less than five
years and therefore, they will end up paying less of their
disposable income to unsecured creditors.

8.
Temporary Deferral Of Obligations Incurred
Pre-petition
• Debtors may be able to temporarily defer making certain rent
or installment debts.

10.
Reject Contracts
• Debtors may be able to "pick and choose" those equipment
leases, real estate leases, or other long term (or "executory")
contracts they wish to maintain.
• Debtors can reject any contract that they believe is not
economically profitable.

11.
Extend Payment Of Unsecured Tax Debts
• Debtors can extend payment of unsecured tax debts for up to
five years.